EL SEGUNDO, CA — Despite a small rise in shipments in June driven by demand for smartphones and tablets, the worldwide market for small- and medium-sized display (SMD) panels is continuing to struggle with overall weak sales in the third quarter, according to a new IHS iSuppli Small & Medium Displays PriceTrak report from information and analysis provider IHS (NYSE: IHS).
Shipments of SMD panels, i.e. panels sized 1.0 to 9.x inches, climbed slightly in June to 188.5 million units, up 1 percent from 186.6 million in May. This marked the first sequential monthly increase since March.
“SMD panel shipments increased slightly in June because of continued strong demand among panel buyers for their smartphone and tablet lines, two products that remain popular among consumers,” said Vinita Jakhanwal, director for small and medium displays at IHS. “Panel buyers also are stocking up to keep inventories at reasonably adequate levels to meet demand for the third quarter and during the run-up to the holiday season. However, outside of the smartphone and tablet segments, the SMD panel market is being dogged by overall soft demand. Economic troubles in the U.S. and European markets have dampened consumer appetite for many electronic items in which these panels are utilized, while a government crackdown on illegal handsets in China is stifling SMD demand there.”
Amid strong demand, pricing for SMD panels for tablets is remaining high. Tablet prices in the third quarter for 7.0-inch and 9.7-inch panels will average $53 and $65 respectively.
In contrast, prices are declining for SMDs used in digital still cameras and personal navigation devices as demand decreases. “Consumer demand for digital still cameras and personal navigation devices has slackened off over time, due to the relative maturity of those products and their replacement by other devices including smartphones and tablets—giving rise to an equivalent falloff in SMD panel demand for those segments,” Jakhanwal said.
Among SMD panel manufacturers, fab utilization rates for the Taiwanese will average 61 percent in the third quarter, up from 55 percent at the end of June. Utilization rates are much higher among the Koreans, remaining at full capacity for LG Display and at 85 percent for Samsung Mobile Display.